The Cost Factors of Background Checks: What Employers Need to Know

, , | March 26, 2024 | By

When it comes to hiring the right talent, background checks are a critical step in ensuring a safe and compliant workplace. However, the costs associated with these screenings can sometimes be a mystery for employers. Understanding the factors that contribute to the expense of background checks is key to budgeting for your hiring process effectively.

1. Scope of the Background Check


The depth of the background check is a primary cost determinant. A basic check might include verifying social security details and checking for any criminal records, while a more comprehensive one could involve a detailed look at credit history, employment history, education verification, and more. The more extensive the search, the higher the cost.

2. Industry-Specific Requirements

Certain industries are governed by regulations that mandate specific types of screenings. For example, roles in healthcare, education, and transportation often require checks that delve into areas relevant to those fields, potentially adding to the overall cost.

3. Volume and Frequency

The number of checks an employer needs to conduct can also affect cost. High-volume and frequent checks may provide economies of scale, potentially lowering the price per check. Conversely, sporadic use of services could lead to higher individual costs.

4. Third-Party Service Providers

Most employers choose to work with third-party solutions for background checks to ensure accuracy, compliance, and efficiency. The choice of provider can significantly influence cost, as some may offer bundled services or tiered pricing structures. Utilizing a tech-forward, machine-learning-based background screening solution can help reduce human error and bias while potentially increasing cost efficiency through automated workflows.

5. Manual vs. Automated Processes

Automated adjudication tools, for instance, can help staffing teams by surfacing only the relevant records for review, as opposed to manually sifting through each record. This not only saves time but can also reduce costs by streamlining the process.

6. Compliance with Legal Requirements

Ensuring compliance with the Fair Credit Reporting Act (FCRA) and other applicable laws can incur costs. Legal advice may be necessary to navigate these waters carefully, thus adding to the overall cost of background checks.

7. Additional Services

Some checks might include services like ongoing monitoring or international background checks, which can be more costly due to the additional labor and resources required.




Investing in a comprehensive background check process can save employers from the high costs of a bad hire, which can amount to roughly 30% of a candidate’s first-year salary. By fully understanding the factors that contribute to the cost of background checks, employers can better plan their recruitment budget and enhance their hiring strategies for a more efficient and compliant process.

Remember, while it is important to be thorough in your background checks to protect your company and ensure a fair hiring process, it is also crucial to be mindful of the associated costs and work towards an efficient and cost-effective strategy.

Disclaimer: The content provided above is for informational purposes only and should not be construed as legal advice. Employers should consult with their own legal counsel to understand their compliance responsibilities under all applicable federal, state, and local laws.